Rockspring sells €100m+ retail portfolio to Warburg-HIH Invest
In a sizeable retail property deal, an open-ended fund of Rockspring Property Investment Managers sold a portfolio of five local German convenience centres to Hamburg-based investment manager Warburg-HIH Invest for more than €100m.
The portfolio, with a gross lettable area of about 43,000 sqm, will be allocated to Warburg-HIH Invest's “Perspektive Einzelhandel: Fokus Nahversorgung” investment fund. The fund is a Spezialfonds, which specifically invests in local convenience centres in West German growth regions, targeting single asset values of €10m to €40m.
The intended investment volume will total between €400m and €450m, of which about €250m is equity capital. Warburg-HIH Invest says the annual dividend yield is expected to be 4.5% to 5.5%. More than 80 percent of the total rent revenues is to come from food retailing. The fund has a lifetime of 15 years, plus an extension option, while the minimum subscription amount is €5m.
Rockspring, now part of Patrizia Immobilien, sold the assets from their Pan-European open-ended vehicle. According to Stuart Reid, senior director at Rockspring, “Following the completion of a number of asset management activities and lease extensions and considering the relative high weighting of the fund towards retail we are pleased to have exited the portfolio at an opportune time in the market to a long term investor of the quality of Warburg-HIH Invest.”
The properties, located in Herten (in the state of North Rhine-Westphalia), Bürstadt (Hesse) Sinzheim (Baden-Württemberg), Reppenstedt and Lehrte (both in Lower Saxony), are fully occupied. The ten biggest tenants, among them EDEKA, Kaufland, REWE, ALDI, OBI, dm and Penny, account for nearly 75 % of annual rental income. With weighted average lease terms of around eight years, they complement the existing fund portfolio, which includes another five local convenience centres in cities in North Rhine-Westphalia (Aachen, Halvern and Bielefeld), Hesse (Usingen) and Hamburg.
Alexander Eggert, Warburg-HIH Invest's managing director and responsible for the group's fund management units, said, "With the number of properties now already up to ten and the investment total at approximately 200 million euros, we have cleared the half-way mark well ahead of schedule and ensured an amazingly fast capital drawdown for our investors in addition to stable returns. We continue to see the food retailing segment as the main anchor of local convenience centres because it is essentially impossible for online retailers to match its assortments.”